Learning how to effectively file a freight claim is important because it will save time and money for your company. A freight claim is a legal demand for the payment of money, stemming from the breach of a contract of carriage. Following specific guidelines and processes is the only way to correctly deal with these claims. There are four essential elements to filing a freight claim:
- The shipment must be identified so the carrier can complete an investigation.
- The type of loss or damage must be stated.
- The amount for the claim must be stated.
- A demand for payment by the carrier must be included.
On top of making sure all four elements are included, follow these tips and suggestions to make sure you effectively file your next freight claim:
- Take immediate action
- Taking immediate action is a crucial step of effectively filing a freight claim. Freight claims for loss or damage are generally governed by Title 49, CFR. Claimants must file the claim, in writing, within the time limits specified in the bill of lading or contract of carriage. The time period cannot be more than 9 months (49 USC 14706e) from date of delivery or, if never delivered, the expected delivery date. Unless otherwise agreed upon in a contract, a carrier must acknowledge receipt of a claim within 30 days. The carrier must then pay, offer to compromise or disallow the claim within 120 days or provide status reports every 60 days thereafter. If the carrier fails to abide by these periods, it should be notified that it is violating the FMCSA claim regulations. Furthermore, per the National Motor Freight Traffic Association, concealed damage must be reported to the carrier within 5 days. After 5 days, if the carrier has not been alerted of the damage, they retain the right to deny the claim. The customer then becomes responsible for providing proof that the damaged or missing items were the result of poor actions on behalf of the carrier. If the customer is unable to provide such proof, the claim will be considered invalid.
- Attempt to mitigate the damages
- A responsibility that all parties of the shipping process share is attempting to mitigate damages. It is your responsibility to give a good faith effort to salvage damaged products unless you consider them to be totally or substantially useless and of no good.
- Make supporting documentation available
- Including supporting documentation is necessary for correctly filing a freight claim. If available, you should include the original bill of lading (BOL), the paid freight bill, inspection reports, notification of loss, copies of request for inspection, invoices, waivers, and other appropriate documents such as temperature reports and weight certificates. The more information you have regarding the freight, the more effective your claim will be.
- Create a detailed description of the losses or damages
- A detailed description of the loss or damage should be properly displayed. The claimant should include the number of items damaged, the type of damage, the value of each unit, and the net loss which results in the total amount of the claim. For example:
- 15 boxes of cell phones – (water damaged) @ $500 each: $7,500
- 5 boxes of cell phone cases – (crushed) @ $100 each: $500
- Total Damages: $8,000
- Amount Salvaged: $250
- Total Claim Amount: $7,750
- A detailed description of the loss or damage should be properly displayed. The claimant should include the number of items damaged, the type of damage, the value of each unit, and the net loss which results in the total amount of the claim. For example:
- The role of 3PLs, brokers or intermediaries
- Many shippers use the services of intermediaries such as brokers or 3PLs (like Logistics Plus) to arrange with carriers for the transportation of their goods. Ordinarily a broker or 3PL does not have any liability for loss or damage since it is not a carrier and does have physical possession or control over the shipments. As a value-added service, Logistics Plus will generally offer to handle the filing and/or collection of claims on behalf of our customers. We also make available the various documents shippers need to file claims. This should not be confused with an assumption of liability, however; and claims must still be filed in your name (not that of Logistics Plus).
If you frequently ship LTL freight or truckload shipments, freight losses and damages are almost inevitable at some point during the process. That’s why it’s important to have an experienced and caring freight management partner on your side. When you work with Logistics Plus, we’ll gladly assist you with the filing or processing of your freight claims, and we’ll go to bat for you with the carriers to best represent your interests. Contact us today to learn more.
